From our CEO: Let’s focus on 20x productivity growth, not 2%

Founder and CEO, Culture Amp

I’m convinced that the next few years we will see a big change in the way we think about workplace productivity.

For a long time, most of the thinking about productivity has been how we can get the workforce to produce slightly more output (by working faster, harder or longer). But the biggest productivity gains comes from a structure and environment in which people can thrive. And fundamentally, that’s the role of management.

Knowledge work has changed the equation

Manual labor continues to become more efficient thanks to advances in technology. As the workplace skews towards knowledge work, companies need the head more than the hands.

In a world of knowledge work, the difference between a great company and a mediocre one will come down to developing an environment which fosters creative thinking and allows people to excel at non-routine problem solving. It is the managers’ job to create a setting in which everybody can use their brains.

This is not to say that managers are more important than anyone else, just that they should be held more accountable than people who report to them for the productivity of the organization.

The Toyota Way

One company that is approaching this in the right way is Toyota. I remember hearing the Chairman say that “what Toyota was really great at was not making cars but creating managers.”

One of the guiding principles of the Toyota Way of management philosophy and practices is: grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. I think this applies to every organization that wants to create better leaders.

To foster great managers, companies should adopt Toyota’s overriding message to managers: base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.

Management productivity or system productivity?

We call it “management productivity” because we hold managers accountable for the performance of their divisions and the people who work within them.

But ultimately, what we’re really measuring is productivity of the system as a whole.

During engagement research, we can determine whether the culture of the company is set up for people to succeed. We gauge things like:

Are your people empowered to take risks and to be innovative?

Do you have the right systems to allow your people to be effective when dealing with customers?

How many of your people get promoted to other departments?

How good are you at creating talent for the rest of the organization?

In a great company, the manager’s job is not to make the local area effective; it is making the whole organization effective by creating a talent pipeline.

Time and again what we see in companies that have built great cultures and gone on to create great outcomes and great businesses, is that those managers create systems that help other managers be more effective. The whole becomes greater than the sum of its parts.

Bench press, don’t benchmark

One of my go-to sayings is: bench press, don’t benchmark. Sure it’s handy to know how you’re doing compared to other companies, but to drive management productivity it is far more valuable to look within.

To bench press your management productivity, look at which leaders are succeeding in your environment, with your people, with your product. Then ask what and how less productive or effective managers can learn from your superstars.

It is much more efficient to learn internally than trying to learn from managers in a different industry or different environment.

The data helps to see patterns in the outstanding managers. Invariably, one of the hallmarks of a great leader is a manager who invests in their people’s development, and who is there to provide both positive feedback and valid and constructive critical feedback.

An environment of success

In the modern world of work, the value that an organization creates is not just whether or not the lowest paid people in the company are able to go 2% faster.

The real value comes from building an organization where people can perform 5, 10, 20 times better. They can do this because they work within an environment in which everyone is thinking about how to maximize output from the system. That’s the true power of management productivity.

Didier Elzinga is a People Geek and CEO/Co-Founder of Culture Amp. You can follow Didier on Medium, Twitter or LinkedIn.